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From Omodele Adigun and Uche Usim, Akure
Economic analysts Thursday, raised the red flag over the Federal Government’s soaring borrowings, warning the development could eventually asphyxiate the country if not mitigated.
Speaking in Akure, Ondo State capital at the 32nd annual Seminar for Finance Correspondents and Business Editors themed: ‘Exchange Rate Management and Economic Diversification in Nigeria: The Pave Option’ the experts hinted that going by government’s borrowing plans, a fresh N6.3 trillion debt may be added to the current debt stock of N39.556 trillion ($95.779 billion as at December 31, 2021) to ultimately push the country’s total debt stock to N45.86 trillion by December 2022.
Notwithstanding this unhealthy trend, they argued it was high time the country invested more in boosting local production and export oriented infrastructure before the huge debt burden sinks the country.
In his presentation, a Professor of Economics and member of the Monetary Policy Committee (MPC) of the Central Bank of Nigeria (CBN), Prof Mike Obadan, expressed concern that Nigeria’s debt stock was becoming an issue that calls for more drastic approach to support the fiscal and monetary authorities to tow the nation’s economy out of the doldrums. He lamented the parlous state of the economy, which he said was a key reason behind naira’s persistent weakness against other international currencies over the years.
“You can’t convert the naira because of the status of Nigeria’s economy. You must have a stock of reserve to back it up at any time but we don’t have that for now, amid this huge sovereign debt stock”.
Also speaking, another economist and Consultant to the Economic Community Of West Africa States (ECOWAS), Prof Ken Ife, stated that the huge funds the Federal Government spends on debt servicing by the Federal Government actually calls for concern.
“We are planning to borrow N350trillion in the next three years, (2025). Out of the figure, all levels of government are preparing to pay only N50 trillion, while they are looking up to the private sector to go and cough out N300trillion. What is it that we are looking to borrow for in this sector?” He questioned.
Ife, however, called on the government to tow the line of Saudi Aramco by listing the Nigerian National Petroleum Company Limited on the stock exchange to enable more private investors bring the much needed funds for infrastructure development rather than a recourse to overseas or domestic borrowing.
